Public reports pack Thursday 09-Jul-2015 19.00 Corporate Committee

Internal AuditReport 2014/2015Page 32FINAL3. Detailed current year findingsFinding1) Payments made post-migration to Oracle 12 – control designThe process for making payments is handled by the Council’s Exchequer Services team. This team extracts thelist of payments from Oracle 12 and manually transfers this list of payments to the BACS payments system.We noted the following control design deficiency:The list extracted from Oracle 12 can be altered before it is transferred to the BACS payment system.Since the migration, neither Lambeth Living nor the Council perform a further review of paymentsmade within the three working day period in which payments can be recalled. This is because paymentruns now take place daily, whereas they previously occurred twice per week, resulting in a constraint incapacity to conduct the checks.We examined a sample of 20 payment runs which took place between the Oracle 12 migration and 21 January2015 and we found that, in all cases, the amount paid out agreed to the amount generated in Oracle 12.ImplicationsInvalid or inaccurate payments may be made if files relating to payment runs can be altered and no furtherchecks are made before processing.Action planFinding rating Agreed action Responsible person / titleHigh riskThe finance team should review payments madeto ensure that they relate to valid payments andLambeth Living should request that the Councilensures that payments are reviewed for validityprior to payment being made.Candice Cupid, Finance ManagerTarget date31 May 2015Reference numberKFS 14/15 1Management commentsThe Council has the following controls in place in relation to payment runs:The BACS run is generated by Oracle and the BACS file is automatically placed on a server.Only three payments officers in Exchequer Team have access to this server. One of these offices placesthe file in C-Series, the system which is used to send the BACS payments information to the bank.Nobody in the business has access to this fileInternal audit report forLambeth Living Limited PwC 4